Zip code ruling may impact R.I.

The California Supreme Court last month ruled that retail giant Williams-Sonoma Inc. violated a state statute that forbids the collection of personal information by asking a customer for her zip code. Williams-Sonoma then allegedly used her zip code and name to find her address for marketing purposes.
The ruling has at least one law firm warning that Rhode Island-based businesses could face similar suits because a comparable law exists on the books here.
“I certainly think there’s a risk that the Rhode Island statute may generate the same kind of litigation as the California statute,” said John Culhane Jr., a partner at national law firm Ballard Spahr, based in Philadelphia.
Culhane, who specializes in defending retailers, said such a lawsuit may prove appetizing to a lawyer looking for an easy class action suit against a corporation with deep pockets. In the wake of the California decision, lawyers there have responded by filing suits against major retailers including Best Buy Co., Coach Inc. and Macy’s Inc., among others.
“It’s like shooting fish a barrel,” Culhane said.
Rhode Island courts’ spokesman Craig Berke said he was unaware of any cases filed locally in the wake of the California decision. But the sheer volume of cases may mean one slipped under the radar, he said.
Lawyers here may need to work harder to win such a case. Culhane said that while the laws in California and Rhode Island are similar, Rhode Island includes one notable difference. Rhode Island law appears to forbid only the requiring of zip codes, while allowing companies to request it on a voluntary basis. Culhane said a good defense lawyer for a corporation could make the case that his client merely requested, rather than required, a zip code. John Barylick, a principal at the Providence law firm Wistow & Barylick, said cashiers rarely make it clear that the zip code is not required to complete a transaction. Still, he said the exception in Rhode Island law that permits requests would seemingly allow retailers hauled to court an easy out.
“This clearly gives retailers a present green light to request the information,” he said. “But I think it would be fair to the consumer if it were clear that providing the information is optional.”
It’s not even clear that Rhode Island courts would allow someone to sue. The Rhode Island law appears to put the power to enforce the statute in the hands of the attorney general, who can levy a $100 fine for every violation.
“What I’m not sure of is whether a clever Rhode Island lawyer couldn’t make an argument that because this is an unfair practice [the court] would allow a suit,” Culhane said.
Amy Kempe, a spokeswoman for R.I. Attorney General Peter F. Kilmartin, said the office has never levied a fine against a retailer for asking a customer for his zip code. And she said the office has no plans to lobby the General Assembly to remove the ability for businesses to request zip codes.
The California court decision, she noted, was just one decision and not part of a wave of judgments about what constitutes personal information.
In local retail circles, few business owners are concerned, said Paul DeRoche, executive director of the Rhode Island Retail Federation. He said managers at the major stores at Providence Place told him they do not request zip codes and few mom-and-pop shops have the ability to turn zip codes into useful marketing information.
“I haven’t seen any overwhelming opposition because I don’t think it’s happening in a lot of retail” operations, he said. Nor has there been much concern in the southern half of the state, said Joe Iacoi, executive director of the South Kingstown Chamber of Commerce. Outside of a few major chain stores and gas stations requesting zip codes from customers wielding credit cards, there do not appear to be any shops engaged in zip code collection, he said.
For shops that do collect zip codes, its elimination would be unfortunate but not detrimental to marketing efforts, said Mary Sadlier, executive vice president at Providence marketing firm (add)ventures.
“It’s one part of the arsenal,” she said. “If it were to end tomorrow I can’t think of an example where it would have any catastrophic consequences.”
Plus, she said some customers may welcome the coupons and other offers that come with providing their information.
Barylick, who studies privacy issues, said retailers collecting zip codes to match with other personal information is unsettling.
“There are certainly other issues that potentially invade privacy in a more personal way but this is personal information like any other personal information,” he said. “We never benefit by having it widely disseminated.”
In the wake of the California decision, Barylick said he would not be surprised if consumer advocates in the Ocean State lobbied the General Assembly to remove the exemption allowing retailers to request zip codes.
“People are increasingly concerned about the [growing] dissemination of their information and it may be time to close this loophole,” Barylick said.
Kempe, from the attorney general’s office, offered a simpler solution to customers at the checkout line faced with a clerk asking for their zip code.
“You can always say no,” she said. &#8226